Nigeria Governor’s Forum (NGF), has blamed worsening insecurity and distrust between state governments and their citizens for low internally generated revenue.
The umbrella body for the convergence of all governor’s in the country said this at a one-day capacity training for members of Finance Correspondents Association of Nigeria at the weekend in Abuja.
Speaking on the theme: “New Approaches to Tax Administration in States”, the Senior Programme Manager at the Nigeria Governors Forum, Mr. Olanrewaju Ajogbasile, said that lack of trust by the citizens on what the government utilise tax revenue on remains the major setback to tax collection in Nigeria
Ajogbasile said the NGF is making concerted efforts in conjunction with state Governors to provide incentives like health insurance for citizens who pay their taxes as and when due.
He also lamented the low Tax-to-GDP ratio of states at 2% is abysmal and must be improved by conscious efforts by States Independent Revenue Services (SIRS).
“Average tax efforts (Tax-to-GDP) of states stands at 2%”.
He said the quantum of SIRS taxes is influenced by tax administration efforts, adoption of tax laws by states andand social contract between the government and the citizens, represented by the quality of public services and public willingness to pa taxes.
Besides the issues and challenges facing SIRS, Arogbasile recognized the steady progress made between 2017-2022 by states in reforming the tax environment and systems to improve Internally Generated Revenue (IGR).
“Adoption of Treasury Single Account (TSA) and cashless policy; Improved collaboration between SIRS and Identity Management Ministries, Department and Agencies (MDAs); the establishment of Joint States revenue committee to improve collaboration between States, local government and in-state revenue generating MDAs amongst others”, he said
Others includes, “lack of standard operating procedures and processes guiding operations of SIRSs and their zonal/area offices; proliferation of private contractors/consultants for same revenue items; and weak collaboration between state and local governments on joint collections”, Arogbasile said.
The Nigeria Governors Forum (NGF) also called for expansion of the tax net as just half of the taxable population is captured for taxes.